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Mad Money

News/Business. (2012) New.




San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)






Cramer 5, Jim 5, Johnson 4, Us 3, Conagra 3, Mastercard 3, Pennsylvania 3, Jackie Wilson 2, Smucker 2, Bob 2, America 2, Obama 1, Ford Tell 1, Nbcuni 1, Asian Pacific 1, California 1, Ford Service Credit Credit Card 1, Autozone 1, Google 1, Organization Online 1,
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  CNBC    Mad Money    News/Business.  (2012) New.  

    October 9, 2012
    6:00 - 7:00pm EDT  

gas. >> i'm melissa lee. thanks for watching. don't go anywhere. "mad money" starts right now. i'm jim cramer and welcome to my world. i always like to say there is a bull market somewhere. welcome to "mad money." other people want to make friends i want to try to make you some money. call me at 1-800-743-cnbc. it is amazing, the moment stocks get really hammered they drum up reasons to sell sell sell sell sell sell sell sell. reasons that are plain as day.
take day as ugly as we have seen dow sank 110 points. what do i hear from people that are selling? how did this? did you know that five years ago today the market hit an all-time high? sure enough here we are with the fiscal stiffs staring right at us. and we are again closing in on the top. get me out of here. last time we were pumped up and this time by central bankers pretty money. they are both ill legitimate. what do we do? we have to sell sell sell. we have to sell. a few months from now, we'll look back and say what were we thinking? how did we not sell? i'm going to shock you. i actually agree with this kind
of addmonition. the one that cautions you. i do it myself all the time. i just don't do it with the stock market. i do it with my kids. i would warn them with things. don't you dare drink and drive. if i catch you, i will struggle not to beat you to a pulp. if you are caught, don't you think about hanging out with those bad kids. you are liable to become one. we are imprinted with one. they did take away the car keys and they did take away the cell phones. you know why you can get away with staying this stuff as a parent? because there is no downside.
you know, it is not like your kid rz s are going to come home say hey dad, i smoked pot and drank while i was driving and i tested my worst friends. that doesn't happen. as a parent. you can't lose that. given that admonishment. but many people think you can't lose by people selling either. you better go fast and sell your stocks because it is the fifth anniversary. you are drinking, driving and texting. i don't have that kind of luxury. i can't admonish you to drop your stocks. there may not be anything wrong with you buying your stocks while they are on sale.
it was down 12 when it was clearly something from a complete and utter nervous breakdown. it must be the same assaying, i told you not to drink a beer and get behind the wheel. at one point apple was up 14 points from that low. i want those 14 points for a trade. you didn't drink 12 captain morgan and cokes. you made 12 points. the stock market is not like kids that smoke pot and get arrested and then get into good schools. there was a place called philen's basement in the heart of boston. i was looking for a good sweater. they would take a nice sweater
that sold for $79 and take it down to $59 in the basement. each week. if the thing didn't sell it would go down more until it finally sold. the trick was to figure out how low it would go before someone else snared it. too often the sweater got bought down 60%. but flene's and we liked to call it. five years ago there was a sweater for $7 9, there was a cost to taking action at $79. the sweater might have traded ahead of you. you had to pay top dollar for a different sweater. do you think that one is wrong? when i was really poor, like
$79, living in $77 ford fair mount? i went up to reading, pennsylvania to the outlet where they made wrangler jeans. they put out this box two for those must have broken flies or something like a bad zipper? i dove into the box. go ask my sister. i grabbed a pant leg and another guy grabbed a leg and we broke the zipper. i'm saying the notion that jeans were expensive five years ago and they must be exsensitipensi? does that make sense to you? i'm urging you to think of stocks the way you think of jeans.
case by case. is cisco cheaper now than it was 19 years ago? here is what matters. what a stock might be worth three years from now, not where it was or where the market was five years ago. what matters is the current prospect of the business. here is the bottom line. pundits, scare the buyers as best you can. remind them about what happened the last time someone got drunk and texted a buy order while driving. me? i'm going to figure out a buy order and then admonish you to do some buying. billy in pennsylvania. >> yes, booyah to you jim.
i bought smucker's. my problem is there is a short a shortage in the container division. how concerned should i be? >> it was a lo gist tick problem. i really like it. i was thinking about recommending the stock in a separate piece today. billy, you are in good shape with smucker's. let's go to mary in virginia. hi, jim, i heard you mention carmax yesterday on your program. and i know it went up in price. i know so many of my neighbors seem to be buying used cars rather than new this year. is this a good time to buy? >> i like to buy them after they come in. and then it comes back down. when it comes back down, you
remember it and then you pull the trigger. that is the way we make the biggest money. the past is not the future. yes, i had to use bizarre examples. i will do anything, any analogy to tell you that a sale is not necessarily disastrous event even if it comes five years after the top. "mad money" will be right back. >> coming up. foot for thought. from favorite snacks to healthy choices. conagra foods is behind america's biggest brands. can they continue to serve up more profits? as cramer talks to the ceo next. and later, debit or credit. all this week, cramer is usie i
his over 30 years of experience. stick around. plus, fuel for thought. energy our lives revolve around it and so do the markets. could this commodity wreak havoc on you? when he goes off the charts. all coming up on "mad money."
talk about trying to stay healthy. i'm referring to conagra foods which you might recognize as the company behind many brands. healthy choice series. that is the brand that was founded by mike harper. he decided there wasn't anything good for you let alone good testing for you. you probably have something made by conagra in your kitchen right now. the company reported backings in september 20th and the company knocked it out of the park.
it was a 9% earnings beat and when it first came out it was wrong. better than expected revenues. en better, they indicated that inflation was under control which was a big deal here. it gave you -- bringing the yield into a battle of 3.6 taking it up to 4%. inside recommended it in late june. conagra is up 60%. since we spoke with the ceo back in july of 2009. they are making acquisitions that are helping to drive the growth. first we need to check in with gary ronkin the ceo of conagra thank you for coming on "mad money." >> it is good to be back.
>> you said inflation was going to hurt your company. has it peaked and are you in great shape going forward? >> i can tell you, jim, that inflation was tough for us in the last fiscal year and going into this year we expected it to moderate and it has modrated more than we anticipated. >> i see corn is high and soy is high and oil is high. what moderated? >> well, i can tell you that it isn't just the market forces. it really is how proactive we've been in terms of our cost management. we have all the dots connected. we have the organization online to be proactive and we have a strong run way of productivity and when you put those things together it has enabled us to
deliver good margin of improofment. >> i'm holding these up. it is healthy week here at nbcuni. how are people responding to your newer healthy choice off offeri offerings. this is what we see to be the future on "mad money." >> i can tell you that healthy choice is a great brand and something that most people probably don't know is that the fda has standards for calories, fat and sodium and we are the only brand that can use the word healthy in our name. we have been able to get those numbers to a place that offers a very strong package and still maintain the taste thanks to a strong r and d team both what
they do from a flavor replacement standpoint and packaging. those are both great innovations. >> while the brand has been around for some time. has it been gaining steam as people become aware of what their heart condition and cholesterol is like? >> well, it has been a tough economic environment for all of us. so, we have been doing pretty well from a market share standpoint and it is really based on the innovations that we have delivered. we have brought some things to the marketplace. i mentioned packaging technology. first was our steaming technology. the cafe steamers in 2008 and
healthy choice cafe steamers was the biggest new strproduct of t industry of that calendar year. since then the steaming platform has been well. we have introduced the bakeden tr trays. that uses smart trays which allows you to bake a product in the microwave than you would in an oven in equal qual taity. >> first, you tried to make a giant acquisition and private label. you have keyed on making the small but valuable acquisitions that are bringing things to the bottom line. you still have a great balance
sheet even after the acquisitions that you have done. >> jim, we stepped back a couple of years ago and said let's have a clear roadmap. we looked in the mirror and said we need to transform this portfolio to deliver the kind of shareholder value because of that we put together a disciplined strategy to go after three pilars or growth. it is based on the fact that over the last six or seven years we have improved our capabilities across all functions. and we have put an emphasis on cash flow. we have got a strong balance sheet. when you combine the capabilities and balance sheet with a clear strategy that is where the recipe for growth is
delivering the values. one is building off of the categories that we have today and the second is to become the fastest growing private label company and we are living up to that strategy. you have done a remarkable job in single serve. >> is that because a at love people want to just not be wasteful and save that money? >> single serve is important because portion control is the best way to manage your weight. we have the best evidence that says portion control is the number one thing that you can do to control your weight. we have 250 meals under your
healthy choice labels that are under 450 calories. we believe that portion control is the driver of that. >> i love the dividend and didn't expect to see the earnings break out. thank you so much. >> thank you, jim. >> guys you want yield and you want growth and you want a clear path for greater earnings down the road. >> stay with cramer. >> coming up debit or credit? sometimes stocks want to go higher. this week cramer is using this over 30 years of experience to held you uncover the two. stick around he is going to tell you about the stocks he is adding to this hot list. >> and later, fuel you're
thought. our lives revolve around it. could this wreak havoc on your portfolio? cramer drills down on the technicals when he goes off the charts. all coming up. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy...
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in the 4th quarter of every single year certain stocks become anoint ed. ♪ hallelujah >> these stocks can do no wrong. and they bye-bye bye-buy buy buy by them. i introduced the concept to you yesterday and highlighted two of the most obvious anointed stocks amazon and google. and added them to our hot list. stay with me. this pattern is too tried and too true to be ignored. before i jump into the next two players on the hot list.
you don't need to like this game in order to profit from it. i hate it. i loath the way hedge fund managers chase stocks at the end of the year. they pay high prices and justify prices based on the outyears. in other words, they are saying hey, yeah, i know. it is darn cheap on 26 team numbers. i have thought this logic was totally non rigorous. however, when you know that tons of money managers are going to pay through the nose with high quality stocks, then why not buy them if you know their list. why not take advantage of this scary sale and buy into a pair of wrangler jeans?
dawnmarie1764 visa and mastercard up. you got to remember that these two stocks are not financials. dawnmarie17 dawnmarie1764they make their money processing payments. they get a tiny little transaction fee.
from paper to plastic. even in america they have plenty of room to grow. they have a global on opportunity that is one of the reasons that the growth of payments is expected to increase at ten to 12%. you should be thinking aha who has double digit. both companies should grow faster than that. that is all well and good. we know longer know that is technology. other companies turn your phone into a virtual credit card. all of these products i do think ebay is a buy and my charitable trust owns it. more important though, visa and
mastercard are coming out with their own dig al watall wallet offerings. and they are clear. the fact is, these companies have market share positions that are unsellable. they control 12% of global credit card volumes and 59% of global debit volumes. what business? i want to be in this business? they are getting the bulk from overseas. sees terrific bogrowth in place like the middle east? i am not worried about this international exposure. we have seen this play out in the united states. they still have a lot of catching up to do and this is not a secular growth story.
even if economies around the world slow down, companies will still keep adopting credit cards and debit cards. they are more convenient than cash. these stocks are about the march of progress. it is not going to be halted by a bad chinese gdp number. plus we know global spending met ticks stablize in july and august after dropping off. things are looking brighter. what else? both companies have pristine balance sheets. visa is sitting on $3.2 billion cash. each have like able management teams. ceo of visa ran provide yan. and before that he was in charge
of fleet bank. how about this masstermastercar? he took over in 2009. i'm hearing this guy is brilliant. he became the ceo of asian pacific. this is a brand guy who understands the emerging markets and by wait. you are welcome on this show. now the great thing about them is that they are both when striking distance, the stocks are pretty cheap. i'm not saying they are cheaper than 2015 earnings, now that we are in the 4th quarter, they are inexpensive on next year's numbers. a we little 18 times 2013 estimates. that is why they love these
stocks. their low price to earnings multiple stocks. how about six times earnings. do you see why the buyers are so relentless? these two growth stocks should spend the rest of the year going higher. i'm predicting a jackie wilson like step up here. they will keep buying more shares and sorry, it happens every year. buy either visa or mastercard now. so you can capture the upside of the move. sure the market was weak today but they love to run to the sale. this isn't drunk buying people this is stone cold sober picking
away at merchandise on sale. >> i wanted to ask you about american express teaming up with wal-mart for the program if you think it will give american express a leg up against other banks? >> this is a big doesn't move the needle doesn't matter not in the eearnings. you buy the stock on this and you will be saying why did cramer tell me to buy that stock? >> no. not a needle mover. >> big california booyer dude. >> right back at you. i know you are not a fan. i'm not either. but, they have taken such a hammering over the last few weeks. today they got a press release.
bam down 6 or 7%. is it time to get in? >> you know, a great call from nate. here is what i do. i first start by looking at a stock that is down. and then i say, okay maybe it is a reasonable evaluation but i need a catalyst to pull the trigger. there isn't one, stay away. you got to think like the big boys. it is the visa, these are all hot stocks for here until year-end may i suggest and cut off your downside but this is the game the big boys are playing. jackie wilson rocks and let's stick around for the lightening round.
mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good.
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it is time for the lightening round.
are you ready? starting with rob. >> booyah jim. >> advanced microdevices. they are getting into the chip game. don't touch that stock not now not ever. >> bernice? >> we've been looking at a couple of others. i have been wondering what your impression is of aluminum? >> i like gilliad and the other is rumored to be a takeover target. i say take off half. don in colorado. don? >> peyton manning, destroyed me.
>> me too. >> what's up? >> fdk. >> specialty chemical company, i can give you dupont which has a good yield and i think is less expensive. james. >> booyah. >> when is a good time to invest in wwe before or after wrestlemania? >> how about no time. i don't think the stock is worth earning. it has a yield but no growth let's go to tim in georgia xgt. >> a big down south booyah to you. going up or down? >> there will be hundreds of
millions of shares coming to you. on the stock ahead of that is a big mistake. i need to go to austin in pennsylvania. >> thank you for taking my call. >> you are quite welcome. >> 15 years ago we okayed some autozone. we sold for a small profit and today it is $3706789 today we own home depot. do you see that with home depot? >> i he think it is inextensive because owens corning blew up. i would buy it under $60. let's go to bob in kentucky. >> jim.
i'm calling about ctl. >> it has a terrific yield. right now it is 7%. i think it is just enough growth that i'm going to recommend you buy it as an altertive. and that is the conclusion of the lightinition round. you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.
bob, these projections... they're... optimistic. productivity up, costs down, time to market reduced... those are good things. upstairs, they will see fantasy. not fantasy... logistics. ups came in, analyzed our supply chain, inventory systems... ups? ups. not fantasy? who would have thought? i did. we did, bob. we did. got it.
. was today's oil rally the real deal? it is the middle east. if you look back over the last few weeks, the price of oil is last month's sell off. new person. author of a trader's book and carlie, i have become more and more impressed with as i've read
her stuff. these speculators have short intension spans. garner says traders liquidate traditions and they pile into t the rally and they rang the register on mass. despite today's strength, garner believes the selling is not yet done. big part of the reason for that is what you see at the bottom of the chart. every week the commission posts
the commitment of traders report. in it they identify traders. keep those in mind for a second. we have this data on who is really betting on oil. speculate on oil not to hedge. these guys refer to themselves as smart money. there is not a lot of evidence that supports that speculation. what is this commitments of traders report? she says it is helpful in identifying bad trades. a very over crowded trade. see the large speck is green?
still long in the crude oil market. it was taken last tuesday, large speculators held 216,000 net futures contracts. today's session, according to garner, historically positions 200,000 have increased the odds that they will liquidate their holdings meaning we could get a major sell off. they are crowded into the it features and they are going to bail at the same time. if that happens how low could the price go? look at the weekly chart. garner believes we could be on the cusp of the weekly selling. perhaps not as panic driven or
volatile. if it breaks down below $88.50, if crude holds you b above thats she so darn negative about this chart? the rsi. this is a indicator that technicians often use before they happen. right now it is trading in the middle of the channel heading 50 only lower. oil is yet to reach over certain
levels where we would expect the pain to stop. the under line securities are undersold. not that big a bounce coming. garner believes that like mr. t in perhaps his greatest role overtime. this indicator predicts pain. they like to tell you what could go wrong. garner doesn't think she is wrong. she thinks the iablilities are not that hot. let's go to the daily chart.
you can see this is an ugly picture by the way. oil is forming a sharp descending wedge. within the wedge $88 very close to the floor of the weekly chart. the next stop is $80 again the same as the weekly. and then there is the moving average line or the macd at the botto bottom. the indicator is lower across that line. this is the chart of the dollar. remember, the price of oil is denominating the dollar. the dollar is bottom and heading higher this was a crucial moment
for her. we should sell it because she thinks the price of crudenot going down. it is still a long way from being over sold. it could be devastating from the price of oil. it makes me want to be lighten up on crude. don't forget what is bad for oil is good for the consumer. >> next, one month to go, mitt romney and the fight of his life. the kudlow report next on cnbc.
she knows that the currency won't give her more. she wanted my blessing to give her johnson and johnson. i said yes. never would i have suggested her to do that. never. >> johnson and johnson only has
to go down $2.50 to make it better for this woman. yet somehow it is reckless to keep her in cd's. in the same show, it yields 7.2%. that would n service terrific fixed income. i couldn't bring myself to suggest it. something could go wrong. but if something would go wrong with j and j, that is different. they should remember this woman's call. she has need of income. she can't get it from cd's. the stock offers real upside. the stock should only be
yielding 1.5%. either one is better than the cd alternative. it is really that simple. mitchell: "the nonpartisan tax policy center concluded that mitt romney's tax plan would cost $4.8 trillion over 10 years." vo: why won't romney level with us about his tax plan, which gives the wealthy huge new tax breaks? because according to experts, he'd have to raise taxes on the middle class - or increase the deficit to pay for it. if we can't trust him here... how could we ever trust him here? oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good.
[ male announcer ] fedex office. now save 50% on banners. [ male announcer ] fedex office. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally. on gasoline. i am probably going to the gas station about once a month. last time i was at a gas station was about...i would say... two months ago. i very rarely put gas in my chevy volt. i go to the gas station such a small amount that i forget how to put gas in my car. [ male announcer ] and it's not just these owners giving the volt high praise. volt received the j.d. power and associates appeal award two years in a row.
♪ busting through five-year highs? maybe today. let's get the government back to free markets. all obama can do is